Posts Tagged ‘General Motors’

photo: Todd Woody

In The New York Times on Tuesday, I write that General Motors has finally unveiled the retail price for the Chevrolet Volt plug-in electric hybrid:

General Motors began taking orders for the long-awaited Chevrolet Volt on Tuesday, pricing the plug-in hybrid car at $41,000.

A federal tax credit can reduce the net cost of the Volt to $33,500, and a 36-month lease will be available for $350 a month with $2,500 due at the signing.

Production of the Volt will begin in September, and the car will initially be sold in California, New York, Michigan, Connecticut, Texas, New Jersey and the nation’s capital, G.M. said.

The car’s suggested starting price is $8,220 higher than that of the all-electric Nissan Leaf, which will also go on sale this year.

With the Volt ready for the assembly line, executives began a full-court press to persuade consumers that the car’s cutting-edge technology and features are worth a BMW price tag.

“It’s a real car — it just happens to be electric,” Joel Ewanick, G.M.’s vice president for North America marketing, said at a dinner Monday night at the Plug-In 2010 conference in San Jose, Calif. “This car is designed for the majority of Americans. This is a car that the average person can drive on a daily basis. It’s not something that’s a unique little niche vehicle.”

“The marketing challenge is communicating how different this is than what they’re used to,” he added.

The Volt’s lithium-ion battery pack gives the car an emissions-free range of 40 miles. When the battery is depleted, a small gasoline engine kicks in to run a generator that supplies electricity to the motor, extending the Volt’s range by 300 miles.

Mr. Ewanick said that a Volt driven 15,000 miles a year would use 550 fewer gallons of gasoline than a comparable gas-only car.

G.M. executives, however, insist on calling the Volt an “extended range electric vehicle,” underscoring the balancing act between promoting its green credibility and its utility as competitors roll out all-electric cars.

photo: Todd Woody

In my new Green State column on Grist, I test drive the Chevrolet Volt in San Francisco and ponder if General Motors’ electric hybrid car will persuade Californians to buy American again:

If you happened by an empty parking lot near San Francisco’s waterfront baseball park Tuesday morning, you would have seen some people putting a low-slung black sedan through its paces on a makeshift track outlined by fluorescent orange pylons.

What was remarkable was not so much that the car — the Chevrolet Volt — was electric, but that it hailed from Detroit.

Toyotas, Hondas, BMWs, and Mercedes rule the road in the Golden State’s coastal metropolises, where sightings of American sedans are about as rare as a California condor.

Like Ford, Nissan, Coda Automotive, Think, and other electric automakers, General Motors brought the Volt to San Francisco because, as I wrote in The New York Times recently, this is where the future of the electric car is unfolding first. (Driving home that point was Thursday’s news that Silicon Valley startup Tesla Motors is buying the defunct Bay Area manufacturing plant that previously produced cars for Toyota and General Motors and will now build electric cars in partnership with the Japanese auto giant.)

So the Volt may be GM’s best chance to reintroduce itself to two generations of California drivers who wrote the automaker off as the maker of hopelessly staid and low-quality cars.

“The Volt is going to make people reconsider Chevy and GM again,” Tony Posawatz, Volt vehicle line director, tells me as a group of journalists and influential electric car enthusiasts waited for their turn behind the wheel.

photo: Think

Think Global, the innovative Norwegian electric car company, has temporarily halted production of its City urban runabout and laid off half its workforce as it considers a sale to survive the credit crisis, Think CEO Richard Canny told Green Wombat Tuesday.

“Think is in a situation where we can’t grow anymore,” Canny said from Think’s Oslo headquarters, where the management team was still working at midnight. “We have started an emergency shutdown to protect our capital and our brand. We’ll need a new and stronger partner, whether that is a 25% owner or a majority owner or someone who buys the company.”

The Norwegian government said on Tuesday that it would not make an equity investment in the automaker but is considering Think’s request to guarantee up to $29 million in short-term loans. “Even a small participation from the Norwegian government will give investors confidence,” Canny said, noting that the company needs to raise $40 million to continue manufacturing its electric car. “The financial crisis has hit at a very critical stage as we’re ramping up production and when external financing is hard to bring into the company and internal funding is limited.”

He said a rescue package might include aid from from the Norwegian government and an infusion of cash from new investors or strategic partners. “We’re putting a hand out. People who would like to work with us should pick up the phone.”

Ford (F) acquired the startup in 1999 and sold it a few years later. Norwegian solar entrepreneur Jan-Olaf Willums and other investors rescued Think from bankruptcy in 2006, aiming to upend a century-old automotive paradigm by changing the way cars are made, sold and driven to create a sustainable auto industry.

As Green Wombat wrote in a 2007 feature story on Think, “Taking a cue from Dell, the company will sell cars online, built to order. It will forgo showrooms and seed the market through car-sharing services like Zipcar. Every car will be Internet-and Wi-Fi-enabled, becoming, according to Willums, a rolling computer that can communicate wirelessly with its driver, other Think owners, and the power grid. In other words, it’s Web 2.0 on wheels. ‘We want to sell mobility,’ Willums says. ‘We don’t want to sell a thing called the Think.’

The company sells the car but leases the battery so buyers don’t have to fork over cash upfront for an electric vehicle’s single most expensive component – an idea subsequently adopted embraced by everyone from Shai Agassi’s Better Place electric car infrastructure company to General Motors (GM).

The failure of the new Think would be a blow at a time when the auto industry desperately needs to reinvent itself. While Think is a niche player and faces formidible competition as Toyota (TM) and other big automakers go electric, it has pioneered the idea of a new automotive infrastructure that includes tech companies and utilities like PG&E (PCG).

Whether Think can survive the global financial crisis remains to be seen, but Willums, who stepped aside as CEO recently but remains on the board, is a prodigious networker with deep contacts in Silicon Valley and elsewhere. In little more than a year he raised around $100 million from an A-list of U.S. and European investors that includes General Electric (GE), Keiner Perkins Caulfield & Byers and Rockport Capital Partners – the latter two marquee venture capital firms formed a joint venture with Think to sell the City in North America. Canny said the U.S. expansion plans are now on hold.

The question now is whether Think’s investors, absent a government bailout, will step up to save the company just as it has started to gain a foothold in the market. In a presentation made Monday, Canny, a Ford veteran, said eight to 10 two-seater City cars a day had been rolling off the company’s assembly line outside Oslo. Think has a blacklog of 550 orders and 150 cars will be delivered by January. The company was set to begin selling a 2+2 version of the City in mid-2009. (Think had planned to begin selling its next model, a five-seat crossover car called the Think Ox, in 2011.)

“There are limited possibilities of funding working capital through bank credits without extra guarantees in today’s financial market,” Canny said, noting that the company hopes to resume production in the first quarter of 2009. “Think’s automotive suppliers are severely hit by the overall industry crisis, leading to tougher terms of parts delivery to Think.”

Green Wombat will throw out one potential savior of Think: Google (GOOG). Many aspects of Think’s innovative business model were born at a brainstorming session that the search giant hosted in 2006 for Willums at the Googleplex in Mountain View, Calif. Given that Google.org, the company’s philanthropic arm, has poured tens of millions of dollars in green energy companies and electric car research, an investment in Think would be another way to drive progress toward its goal of a carbon-free economy.

Photo: SolarWorld

When Green Wombat met with SolarWorld COO Boris Klebensberger last month, he noted that the German solar cell maker opened for business in 1998 just as oil prices hit an all-time low. “The company was founded by five crazy guys who people thought were on drugs, ” he laughed.

They still might. SolarWorld, now the world’s fifth-largest solar module manufacturer, has made an unsolicited $1.3 billion offer to buy General Motors’ German-based Opel division. And why would a renewable energy company want to get into a fossil fuel-dependent business? To build green cars, of course.

“The automotive industry is down a deep well and when you’re in a deep well you have to find a new product for the future,” SolarWorld CEO Frank Asbeck told Green Wombat as he was getting out of taxi Wednesday in Rome to attend the dedication of a SolarWorld solar array at the Vatican. “The next cycle will be renewable energy. The switch will be from automotive to electromotive, or as we call it, sunmotive.”

If the Pope can go green, why not another tradition-bound global institution?

If SolarWorld’s bid seems comically low for a century-old automotive powerhouse, consider this: As of Wednesday morning General Motors’ (GM) total market capitalization stood at $2.2 billion. That’s not a typo — Sergey Brin and Larry Page probably have that much rattling around the change drawers of their Priuses (TM). SolarWorld’s market cap, in contrast, is $1.6 billion.

The SolarWorld bid does come with a rather large catch, however. The company wants GM to make compensation payments of 40,000 euros (about $51,500) per Opel worker for a total of 1 billion euros ($1.3 billion) — what the automaker would have to shell out under German law if it shut down. Opel has been something of a jewel in GM’s crown, but it has suffered from its parent’s mistakes and now Opel executives themselves are asking the German government for a billion-dollar bailout.

GM has dismissed the SolarWorld bid out of hand while some financial analysts called the offer a PR stunt. If it was a joke, it’s been a costly one: the company’s shares initially plunged 19% after Jefferies questioned management’s credibility and downgraded its stock.

“We’re not making jokes,” Asbeck says. “We say we’ll give a billion and General Motors gives a billion. We are strong enough in renewable energy to give scale to old fossil fuel industry.”

While SolarWorld has no plans to make a sun-powered car like the experimental racer (pictured above) it built, Asbeck says the company would retool Opel to increase production of green cars by 5% each year, transitioning from plug-in electric hybrids like the Chevy Volt to all-electric vehicles. “We think extended range cars are the car for the next five years,” he says, noting that Opel management would be left in place but given a new mission.

SolarWorld’s chances of acquiring Opel might appear slim, but Asbeck’s strategy is sober. Just witness Silicon Valley startup Better Place’s success at signing deals with the governments of Israel, Denmark, Australia and California to build an electric car infrastructure and its alliance with Renault-Nissan to produce battery-powered vehicles. Even Ford (F) executive chairman Bill Ford has been developing a green strategy for the auto industry, according to The New York Times.

“I think that times have changed and we as a solar company can export our spirit of building a new industry,” says Asbeck. “Opel can be the first green car company in Germany.”

About Green Wombat

Green Wombat is written by
Todd Woody, a veteran environmental journalist based in California who writes for The New York Times, the Los Angeles Times, Grist and Yale e360. He's one of the few people on the planet who have held a northern hairy-nosed wombat in the wild.

Todd formerly was a senior editor at Fortune magazine, an assistant managing editor at Business 2.0 magazine and the business editor of the San Jose Mercury News.